Explainer: Four things to look out for at COP29 climate summit

The annual COP climate summit – taking place this year in Baku, Azerbaijan – is an absolutely massive event. More than 40,000 people are attending, more than attended the 2015 Paris summit (though only half of the 80,000 or so at last year’s COP in Dubai).
As the first major diplomatic event after the US Presidential election, the looming shadow of Donald Trump will receive a lot of attention. But there are crucial issues being worked out in Baku which could determine just how unbalanced the global climate system gets in the coming decades.
Newsroom has assembled this guide to the key things to look out for at COP29, cutting through the technical UN jargon and vague diplomatic speak.
As part of the Paris Agreement, countries committed to setting a new global finance goal after 2025. The current goal, of US$100 billion a year from developed to developing countries, ran from 2020 through 2025 – though the developed world only met it beginning in 2022.
The new goal is the first opportunity in more than a decade to adjust for what we now know are increasingly expensive adaptation and emissions reduction costs. Climate Change Minister Simon Watts says he expects a target in the “early trillions”, though there are some caveats to that.
This is more than just a good-hearted aid project. The developing world is responsible for 75 percent of annual emissions. If developed countries can’t support them to transition, they just won’t do it – and the world needs as many people in this together as possible to keep warming to less catastrophic levels.
What should you look for in a deal?
First, the structure of the fund. Developed countries want a multi-layered fund (Watts compared it to an onion) with a core of public finance for the developing world in the hundreds of billions, another layer of private investment which could really hit the trillions and maybe a third global layer trying to capture all finance flows, domestic and international.
Developing countries are wary of this model and say public finance is preferred. They worry private investment will turn out to be extractive, saddling them with high interest loans and offering few benefits.
Second, what the money goes to. Developing countries say loss and damage (essential reparations for current and future climate damages) should be included in the fund, while the developed world says there should be a separate mechanism for that. Everyone agrees climate finance should include adaptation and emissions reductions, but there’s disagreement about the weighting each should receive.
Third, who pays. The current finance goal is paid only by countries which were members of the OECD in 1992, when the UN climate treaty was signed. These nations (including New Zealand) argue that the world is a different place than 30 years ago and countries which have significantly developed like South Korea and China should pay up too.
Finally, the amount of money itself. This all hinges on the earlier questions – an onion fund might offer more cash at a headline figure, a fund which China contributes to could be much larger and a fund which excludes loss and damage might be considerably smaller. But some number in the trillions is likely to be landed on, even if that represents more than just the public finance flows currently counted as climate finance.
For even more detail on these issues, you can see Newsroom’s deep dive into the coming climate finance debate.
One of the other big agenda items at COP29 is to finally settle the rules for global carbon trading. Two different types of trading were meant to be established by the Paris Agreement.
First, countries could enter into bilateral arrangements. New Zealand might pay Vietnam to shut down a coal factory, build a solar farm or not cut down a forest. Then the emissions savings from that would show up on our carbon balance sheet, not Vietnam’s.
Second, there would be a global carbon market, as existed under the Kyoto Protocol. Here, countries would produce carbon credits for doing things like those above, then auction them off to the highest bidder rather than entering bespoke deals.
A lot of progress has been made on carbon trading since Paris, but some key things still need to be settled.
Keep an eye out for clarity on what projects exactly are eligible to collect credits. This will be the most important factor which determines whether the carbon trading becomes a genuine emissions reduction mechanism or just a bunch of hot air like Kyoto.
Countries are also hashing out how transparent they need to be about their deals with one another and whether they can revoke authorisation of carbon credits to return the savings to their own balance sheets.
This isn’t the coalition Government’s first COP, but last year’s started just days after ministers were sworn in. This year, Watts will be heading to COP after New Zealand has garnered international headlines for repealing the offshore oil and gas ban, proposing to fast-track consents for new coal mines and abandoning world leading efforts to price agricultural emissions.
New Zealand has been granted the Fossil of the Day award from the Climate Action Network at three COPs in a row. Will we get another one?
More substantively, how will the Pacific receive a New Zealand Government that is walking back so many important areas of climate policy? In other fora, New Zealand ministers say the climate backtracking hasn’t been a big deal. But at a climate specific forum, will that still be the case?
Vanuatu’s special envoy on climate Ralph Regenvanu told a reporter in September that the new Government is less aligned with the Pacific.
“With Australia it’s not surprising, they generally don’t align with the Pacific states on climate change ambition. New Zealand recently with the new government is tending not to align that much anymore,” he said. Look out for more comments like this from Regenvanu and others.
While a global commitment to phase out fossil fuels was the headline out of last year’s climate summit, emissions cuts are expected to take a backseat this year. Partly, that’s because the finance goal will dominate so much of the negotiations. But the host, Azerbaijan, is also a petrostate with an economy deeply reliant on oil and gas.
There will be a significant amount of scrutiny on Azerbaijan, with NGOs looking out for any attempt to greenwash the country’s record on climate. Then there are the questions about human rights in the authoritarian state, which has imprisoned journalists and political opponents. The family of the ruling Ilham Aliyev owns or is linked to many of the “official partners” of the climate summit, according to the Organised Crime and Corruption Reporting Project.
Whether or how these issues bubble up at the summit could do a lot to stymie or distract from negotiations.
That Azerbaijan is hosting the event at all is a fluke of geopolitics. Hosts rotate through different regions and this year’s is Eastern Europe. After the Russian invasion of Ukraine, the hosting of the summit became deadlocked, with Russia blocking anyone sympathetic to the Ukrainian cause and other nations ruling out Russia and its allies like Belorus.
Azerbaijan was considered acceptable to both factions but not to bordering Armenia, which has a longheld dispute over the Nagorno-Karabakh border region. Azerbaijan seized the region back from Armenia in September last year. After a ceasefire, the countries agreed to take steps towards normalising relations and Armenia dropped its opposition to Azerbaijan’s hosting bid as part of that.